Taiwan and London bourses mull cross-border trading

04 September 2014   Category: News, Asia, Global, Taiwan, Europe, United Kingdom   By Hui Ching-hoo

Taiwan Stock Exchange (TWSE) held discussions with the London Stock Exchange (LSE) over potential cross-border trading after the former’s Chairman Lee Sush-der led a delegation to the UK capital on September 1.

During the visit, TWSE hosted a seminar to introduce the capital market’s latest developments to local institutional investors. It also promoted recent market reforms, including the launch of a blueprint for corporate governance and an upgrade of TWSE’s trading system.

Mr. Lee also held talks with LSE Chief Executive Officer Alexander Justham to discuss potential cooperation in areas such as bilateral market promotion, cross-border trading and RMB-denominated product development. Both Taiwan and London are currently developing offshore RMB centres.

As of the end of July 2014, the total value of RMB deposits managed by Taiwan’s domestic banking units (DBU) and offshore banking units (OBU) was 293 billion RMB (US$46.88 billion).

London was the first country outside of Hong Kong to be awarded the status of overseas RQFII hub in late 2013, with the granting of 80 billion RMB in RQFII quotas.

Leveraging on London’s experience in developing multi-currency products, the two exchanges hope to foster mutual cooperation in developing RMB-denominated products and provide more diversified investment options.

Mr. Lee said: “Stock exchanges around the world are committed to developing closer ties and trading links with foreign stock exchanges. TWSE has spared no effort in exploring potential cooperation initiatives with international stock exchanges.”

The talks come four months after TWSE’s management visited the Singapore Stock Exchange to discuss a Taiwan-Singapore trading link. Meanwhile, TWSE has also started discussing potential cooperation with the Japan Exchange Group.

Mr. Lee said the bourse aims to work with more international stock exchanges in order to boost the liquidity of Taiwan’s capital market, and bring about more investment opportunities.

According to data from TWSE, the benchmark Taiwan Stock Exchange Weighted Index has grown 9.6% year-to-date as of August 31. The trading volume also rose 8.8%.